Last summer, Yahoo took the liberty of updating its standard terms of service to allow itself to modify paid search accounts as it sees fit, leaving the advertiser to accept full responsibility for Yahoo's keyword updates, copy updates, and other campaign modifications.

As a good search marketing practice, Yahoo shouldn't be touching these campaigns at all without the advertiser's desire for assistance (in effect, the only choice under these terms is to accept the terms or lose your account access), and search advertisers running on the Yahoo master service terms should pay close attention. Yahoo itself should be very concerned, as this will send many advertisers (in-house, agency, consultant, independent) bolting for the exits, ultimately driving a greater share of the paid search market into the hands of Google and others.

This change in terms may also partially be the reason for the company's reported loss of paid market share in Q4 2008, as blogged by Silicon Alley Insider on Friday.

Again, these changes are not reflective of negotiated terms of agreement that many agencies and search managers have in place. But it would be fair to say that most of those using Yahoo paid search do not have negotiated terms, and thus have no choice but to accept the standard deal. In case you haven't read the language, here it is again:

"OPTIMIZATION. In the U.S. only, for those advertisers not bound by an Insertion Order, we may help you optimize your account(s). Accordingly, you expressly agree that we may also: (i) create ads, (ii) add and/or remove keywords, and/or (iii) optimize your account(s). We will notify you via email of such changes made to your account(s), and can also include a spreadsheet of such changes upon your written request. If you would like any of such changes reversed, please reply to such email within 14 days of the change(s), and we will make commercially reasonable efforts to reverse the change(s) you specifically identify. Notwithstanding the foregoing, you remain responsible for all changes made to your account(s), including all click charges incurred prior to any reversions being made. It is your responsibility to monitor your account(s) and to ensure that your account settings are consistent with your business objectives." (emphasis mine].

The issues raised with this approach are numerous, but the last sentence of the provision above is a good place to start:

1) Yahoo is not concerned about managing your business objectives and ROI; they are concerned about theirs. There are myriad reasons for bidding low/high, adding/removing copy, title keyword construction, etc. that contribute to business objectives. Yahoo is not reaching out to understand your business or comprehensive business strategy, so these "optimizations" are effectively blind, and without a true business or ROI context.

Here are a couple of other issues with the ToS:

2) Yahoo wastes search advertiser's time. Not only do search advertisers now have to worry about managing their Yahoo accounts, they also have to manage Yahoo's management of their accounts. It's no consolation that the company will notify you of updates. The burden of evaluating and appealing Yahoo's optimizations still lies with the advertisers. If you are managing your Yahoo account properly based on the new terms, then your workload may have just gotten much heavier, depending on the size of account and amount of revisions.

3) Is there anything to stop Yahoo from maxing out advertiser's budgets? It appears there is a possibility within point (iii) "optimize your account(s)" that spends could be fully pushed out to client-authorized levels, regardless of the quality of the traffic. Maybe a Yahoo representative can jump in to this column's comments section and explain and clarify, but the way this is worded, there appear to be no controls here.

If for no other reason, Yahoo should change this language and approach to regain and retain the trust of the search marketing community and advertisers, and the subsequent market share that it represents. Search marketers and advertisers have been the company's greatest evangelists, and have also been a key element to building the success of search engine channels. Clauses like this may very well be the thing that destroys many years of built-up paid search share in very quick order.

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7 comments about "Yahoo's Updated ToS: The Fox Eats The Hens, The Eggs And Itself ".

Tim Daly , January 14, 2009 at 12:28 p.m.

Yahoo has been changing ad copy and structures without permission for a long time, this is not a new situation. I ran into them doing this as far back as 3 to 4 years ago. This appears to me like a process of legalese that keeps them from being sued going forward. My curiosity is what prompted them to finally put into writing an ongoing practice. That is the big question.

This seems to flow into a legal issue, not just allowing Yahoo to do such damage to clients, but any company to adjust contracts and corner clients into signing without an alternative. Think mortgages as an example. Of course, the publicity from those with platforms could initiate a suggestion of avoidance the purchase of Yahoo search - like a strike - until the required change is made. We still do have some choices. Now that I know, I will make sure I eliminate Yahoo as a search choice.

Thanks for posting this information. I immediately stopped all of our company's advertising with Yahoo upon reading this change in their policy (which apparently has been around for some time). In watching the news on Yahoo over the past 18 months or so, it seems they are in dire need of some good ol' fashion business leadership. I greatly appreciate the times we are living in, where the Internet allows us to still be able to make some decisions about how we will let corporations treat us. Although I must admit, if Google were to pull this kind of a stunt, I would be hard-pressed to replace their services.

michelle rutkowski , January 14, 2009 at 1:32 p.m.

Good column. I interpret the legalese as you do Rob -- allowing Yahoo to max out your budget, with you being responsible for charges with no recourse. I love that they bracket/limit customers' response time to catch and reverse changes, but then have very squishy language about when they'll get around to making changes requested by customers. And apparently customers are still responsible for charges until they get around to changing things as requested. It's not a very professional or "best practices" way of contracting for marketing services in my book!

This article comes at a timely moment. I was actually just in the process of opening an account with Yahoo to market my company. I hadn't taken the final steps. As it is, I won't be. :)

Thanks for the tip. I know Facebook has gotten the heat for similar issues. These companies do need to remember that they must treat their valued customers as kings if they want to get their hands on the cash. ;)~ Making people mad isn't exactly a great way to grow a business...